Final answer:
The statement about the cost object in a job-costing system is true. Job-costing systems track costs for individual units, batches, or services, and involve fixed and variable costs crucial for short-run economic decisions.
Step-by-step explanation:
The statement that in a job-costing system the cost object is an individual unit, batch, or lot of a distinct product or service is true. A job-costing system is designed to track the costs associated with a specific job, which can be a single unit or batch of products, or a distinct service provided. This method is crucial in industries where products or services are tailored or differentiated, such as in manufacturing custom furniture or providing specialized professional services.
Considering the costs involved in production, we observe that in the short-run, total costs are comprised of both fixed costs and variable costs. Fixed costs are those that do not change with the level of production, such as rent or equipment leases, while variable costs fluctuate with production volume, like hiring additional labor. These cost components are essential for making economic decisions about future production or pricing.